Corcel plc (AIM: CRCL): Material increase in KON-16 and subsequent farm-out to Sintana Energy (SEI.V CN)
• Corcel has agreed to acquire a net 27% additional stake in KON-16 (onshore Angola) from Intank for US$0.5 mm in cash. As part of the deal, Intank will receive a 5% overriding royalty on the first development area.• Corcel has subsequently agreed terms to divest a 5% net interest in KON-16 to Sintana Energy for US$2.5 mm in cash. In addition, Sintana will receive a 2.5% net profit interest on Corcel’s share of KON-16 until reaching US$50 mm, after which the net profit interest reduces to 1.5%.
• KON-16 remains Corcel’s flagship asset, with its net interest increasing from 49.5% to 71.5%. This expansion raises WI unrisked prospective resources from ~200 mmbbl to ~285 mmbbl.
• The two transactions are cash accretive, providing an additional US$2 mm in net funding, which reduces potential dilution at the corporate level.
• We have increased our target price of from 1.00 pence per share to 1.50 pence per share, reflecting the transactions’ impact. The transaction with Sintana values Corcel’s 71.5% in KON-16 at ~US$36 mm (based on US$2.5 mm for 5%). This represents 2.3x the current market cap of Corcel of 0.5 pence per share.
• A new Competent Person Report (CPR) with independent prospective resource estimates for KON-16 is expected in early 3Q25. Additionally, Corcel plans to acquire 300-line km of 2D seismic to refine imaging of both shallow post-salt and deeper pre-salt targets.
• Successful drilling of a post-salt target at KON-16 (~100 mmbbl) in Angola, could add ~1.60 pence per share, with a further unrisked value of 4.85 pence per share for the pre-salt target (~300 mmbbl).
Sintana Energy
Sintana is listed in Canada with a market cap of ~C$240 mm. Sintana was an early entrant in the Orange Basin (Namibia) and is a partner to Galp on the giant Mopane discovery. The company also has partnerships with Chevron across two additional exploration licences in the same basin, in Namibia. We view Sintana’s participation in KON-16 enhancing both the depth and credibility of the asset.
Valuation
We have increased our ReNAV from 0.99 pence per share to 1.51 per share.
Regency Mines is engaged as a natural resource exploration and development company. Co. manages a balanced portfolio of mineral and oil and gas projects and investments at different stages of development. Co. is active in multiple international locations including the U.K., Papua New Guinea, the U.S. and Greenland.
Auctus Advisors is a specialist Equity Capital Markets and Advisory business with a focus in the Energy Sector.
The partners have complementary skill sets, with decades of experience across Equity Capital Markets, Investment Banking and the Energy industry. We have worked at Société Générale, Canaccord Capital, BMO Capital Markets and Schlumberger. Most recently we have worked together for many years at GMP FirstEnergy.
Auctus has been set up at the beginning of a new decade in which we see significant opportunities in the Energy space. Globally, demand for energy is at record levels and continues to grow. Conversely, investment in traditional energy sources has been severely constrained. We believe this imbalance creates opportunities for both companies and investors.
Auctus provides Corporate Broking, Equity Research and Investment Banking services.
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